El proyecto

IMPORTANT NOTE: high risk product - direct debt investment to biogas company. No local partner in between to cover risks.

Basic info:

Issuer: SimGas Kenya Ltd.
Currency: EUR
Amount: 100,000 (senior debt)
Maturity: 36 months, semi-annually and linearly amortizing
Collateral: None
Interest rate: 7% p.a.

SimGas has the right to do an early repayment with a penalty fee of 1%. No early repayment is possible during the first 12 months.

Direct investment

This is a direct investment to a company (rather than lending to a financial institution) and therefore it is recommendable that you are careful with the amount you will invest. 

Documentation

• Information document of the issuer
• INRiSC: credit analysis (download here)
• SimGas Business Presentation (download here)

Project #10

With a loan of EUR 100,000 SimGas will provide a loan to another 148 farmers living in the Kenyan county of Muranga to enable them to each acquire a SimGas biogas system. These systems allow farmers to produce clean gas by digesting the manure of their cows. This provides huge benefits as they are no longer required to cook on open fires and breath in toxic fumes. The biogas systems also produce organic fertiliser, which can be used on their land or sold to other farmers.

SimGas partners with 25 dairy cooperatives under the Muranga Creamers Union. Using the existing financial infrastructure of these cooperatives,  dairy farmers can pay with milk to pay off their biogas digesters. In turn, the dairy cooperative pays SimGas. The payment agreements with the dairy cooperatives are monitored by SimGas Kenya head office.

The 148 biogas digesters will be sold, installed and serviced by SimGas teams in the Muranga county.

Impact

With this loan 148 families and thus approx. 740 Kenyans living in Muranga county are impacted. They will enjoy the benefits of cooking on clean gas and on having access to organic fertiliser. The impact is quite significant and is as follows:

1. Health benefits as people do not have to cook on fossil fuels such as charcoal or wood, and thus eliminate the consumption of toxic fumes (the equivalent of 20 cigarettes per day)
2. On average, people save 35-45% of their household budget, which they do not have to spend on wood fuel (Kenya Bureau of Statistics, 2015)
3. Additional income of approx. EUR 270 per year as a result of using the organic fertiliser on their land (a 25-200% increase of crops) and/or selling it to other farmers nearby
4. Preventing the cut down of approx. 7.42 tons of wood per year (Kenya’s forest declined from 10% to 1.7% of its total territory between 1963 and 2016)
5. Preventing more than 8 tonnes of CO2-eq emission per year per household
6. Saving approx. 2-4 hours per day for a family as it takes much longer to cook on firewood and clean all the pots and the kitchen as compared to using biogas. Furthermore it is no longer required to gather wood or going to the market to buy firewood or charcoal.

Summary SimGas

SimGas is a commercial biogas company that develops, sells and installs biogas digesters for rural households in East Africa. We do this because biogas digesters save lives, money, time and the climate.

SimGas has facilities in Kenya (est. 2013, 92 employees),and The Netherlands (est. 2009, 10 employees). The biogas systems enable rural households with livestock to use the manure from their livestock to generate clean fuel for cooking and organic fertiliser: two valuable assets to increase income whilst saving life, nature, money and time. The high quality, modular, domestic biogas systems can be installed in 2 days. To date, SimGas has provided >2,500 farmers with biogas systems.

What does SimGas drive to design, produce and install biogas systems? Worldwide, about 3 billion people use solid fuels for cooking (FAO, 2008). Every year, the smoke from open fires and traditional stoves - leading to indoor air pollution - kills about 4.3 million people (WHO, 2011). In other words, every 8 seconds, someone (mostly women and children) is dying due to inefficient use of biomass fuel. Biogas is a clean cooking fuel and thereby eliminates indoor air pollution, putting an end to one of Kenya’s top cause of death and disease.

SimGas desires to enable their customers to become more productive, independent, cost-efficient, and healthier farmers. They want to make biogas accessible not just for the lucky few, but for the worthy many. That’s precisely what the biogas systems do. By doing so, SimGas helps create healthy and safe environments for rural households while contributing to the reduction of indoor air pollution, deforestation, and carbon emissions.

SimGas’s business model is as follows; to the clients, an interest rate is charged for the loans which enable them to buy a SimGas system. The company also takes a small margin on the biogas systems itself.

Next to that, SimGas has a deal with the World Bank (Ci-Dev) that buys carbon credits, which allows SimGas to provide a discount on the systems of EUR 200 each. Thanks to selling these credits, SimGas can provide a guarantee and full service for 5 years. On average, the systems will remain functional for approx. 20 years.

More information on SimGas:

Vision:

SimGas believes in empowering people by offering them graceful, reliable and sustainable tools that help to improve their lives and income positions.

SimGas takes social and environmental impact just as seriously as economic impact. We are creating impact through mass production, modularity and standardisation, combined with highly scalable business models. Our secret is the combination of local presence, great partnerships and smart investments in research and development. We measure what we do, learn from the results, and adjust our strategy accordingly. This is what makes SimGas a true trailblazer and helps us create immediate impact that lasts.

SimGas aims to be a game changer and is already the largest supplier of biogas systems in Africa. Their mission is: “By 2030 our domestic biogas products will improve the lives of 10 million people in Africa and Asia” In order to accomplish this goal, SimGas is scaling up in our home markets and in close collaboration with local partners we will ramp up sales in neighbouring countries Rwanda, Ethiopia, and Uganda.

Management team:

Mirik Castro – CEO SimGas East Africa

Mirik (MSc., TU Delft) is a systems engineer in Policy Analysis and Management. He is a serial entrepreneur, having established Holland Turnaround, John’s Phone and other companies in the Netherlands, and has previously worked at Boston Consulting Group and Stork NV. As CEO of SimGas East Africa, he manages a growing team of 80 employees, including admin, sales, production, and installation crew in Tanzania and Kenya. Mirik lives with his family in Tanzania since 2011.

Oliver Kynaston – COO SimGas East Africa

Oliver (MSc., Bristol University, UK) is a physicist, researcher, patent holder, brewer, and hang glider pilot. With the belief that developing products for the off-grid market in East Africa can teach the world how to live sustainably, Oliver moved to Tanzania in 2010 to start a business in renewable energy products for households. SimGas persuaded him in 2015 to lead our operations in Tanzania and Kenya. Under his wings, a team of more than 80 is making households in East Africa (including his own) happy with biogas.

Carlos Johnson – Financial Manager SimGas East Africa

Carlos (BSc., Universidad de Chile, Santiago) is a seasoned Finance Manager with more than 20 years of experience in key positions in Finance and Management Control at international organizations in the IT, energy and non-for-profit sectors. Carlos has working experience in Chile, Brazil, USA, Venezuela, Thailand, Indonesia, Lesotho and Kenya.

Dorine Poelhekke- Head of Business Development & Marketing Officer

Dorine (MSc., TU Delft) is a Strategic Product Designer with more than 5 years of field research, business development and piloting experience in East Africa, West Africa, India and South East Asia. Dorine recently moved to Nairobi to lead our business development team in Kenya.

Christina Mng'ong'o - Factory & Supply Chain Manager

Christina (Msc, Dar es Salaam Institute of Technology) joined SimGas in October 2013 as Quality officer, Hub Manager of the Tanga branch, Deputy factory Supervisor for Gesishamba Production Ltd factory. She worked her way up to become Factory- and Supply Chain manager. Christina is the youngest SimGas employee and is an expert in injection moulding- and biogas technology.

Moses Gekara – Country Manager SimGas Kenya

Moses Ogeto is a trained engineer in Computer Science and HSSE planner. He has worked for 3N International as Database/Data Entry before Joining National Bank of Kenya in the same capacity. He has worked for 14 years as Operations manager for Pressure Vessels Ltd. He joined SimGas Kenya as Country Manager in October 2013 and has since then been of tremendous value in operations and sales. Moses knows all our customers in Kenya!

Track record:

2017 highlights:

• Raised EUR 1,024,900 through Lendahand, thereby providing loans for SimGas biogas digesters to 1540 farmers in Kenya.
• Partnered with 60+ primary dairy cooperatives in Kenya to enable farmers to pay off their biogas digesters through the cooperatives milk check-off systems

2016 highlights:

• World Bank’s Ci-Dev buys 500,000 carbon credits generated by our biogas systems
• Winner IDEO.org Amplify Challenge with our Biogas Milk Chiller
• USAID’s Powering Agriculture grantee

2015 highlights:

• Biogas Milk Chiller prototypes in Tanzania
• Pilot for bio-sanitation systems at schools in Kenya and Tanzania
• Winner Lettinga Award

2014 highlights:

• Dutch Minister for Foreign Trade & Development Cooperation Ms. Lilianne Ploumen opens our new production line in Tanzania
• Inclusion in the Africa Biogas Partnership Programme
• Global Alliance for Clean Cookstoves Spark fund grantee
• Ashden Awards Finalist

2013 highlights:

• Founded SimGas Kenya Ltd., sales start in Kenya
• Start product development of Biogas Milk Chiller and Biogas Stove 
• Siemens Empowering People Award Finalist

2012 highlights:

• Mirik Castro moves to Tanzania to start local production and sales
• Founded SimGas Tanzania Ltd.
• UNFCCC registered Biogas Program of Activities (PoA) for the trade of carbon credits

Previously realized:

http://simgas.org/trackrecord/